SHORT SALE 101:
"RUMOR vs. REALITY CHECK"
=
Solutions To Help NJ Homeowners Avoid Foreclosure
(March 2009 edition)
RUMOR: Let's say a financially distressed homeowner owes a mortgage lender/bank a certain amount of money for a mortgage note, and the bank agrees to allow a SHORT SALE. This means the seller should purposely list their home at a high price since the bank will accept an offer from a buyer for 10%-20% less than what the sellers actually owe the bank, right?
REALITY CHECK: NO. This is NOT necessarily true! Many lenders understand the general public has "caught wind" to what a SHORT SALE home actually is, and because of that, the rules of engagement are changing. Every mortgage lender is different and is governed by various rules when it comes to what price is acceptable vs. unacceptable. Now don't get me wrong; often times mortgage lenders are willing to "bend" a bit and accept a less than attractive offer from a buyer for a SHORT SALE home. However, I have had lenders tell me directly "we will let certain homes go to FORECLOSURE before we will just give it away for almost no money in a SHORT SALE."
They didn't make that statement based on principle, but rather on mathematics. If a home is listed on the market for sale, and it doesn't yield contract offers high enough to cover the mortgage + the fees to sell the home + any delinquent utilities + delinquent home owners association fees (if applicable), the lender may feel it could be less costly to allow it to be FORECLOSED on. Lenders are often willing to negotiate when it comes to what "sale price" they eventually accept for a SHORT SALE, but a 10%-20% discount to a potential buyer is often NOT accurate when the SHORT SALE home is: #1 priced appropriately for the current market and #2 the home shows well.
SOLUTION = If you're a homeowner who is financially challenged and it seems like you can't figure things out on your own, make sure you speak to your mortgage lender immediately. Be honest with them about your circumstances, and ask them for all possible solutions to help improve your situation. If they don't offer you any favorable options, then ask them about their specific steps to get you consideration for a SHORT SALE.
After doing your research with them, interview and select a Realtor who understands how the SHORT SALE process works. Be certain the Realtor is upfront with you about where the current prices of homes comparable to yours are. This way you will have realistic expectations about what to expect, and you can price your home appropriately based on current market conditions. By following these suggestions, you'll be one step closer to attracting a buyer that will write a contract to purchase your home, and even closer to getting your mortgage lender to say SHORT SALE APPROVED!
Here's last month's edition (February) of Short Sales 101: Rumor vs. Reality Check
Luxury homes like this in Manalapan can also offer short sale opportunities
Information courtesy of:
AMBER NOBLE-GARLAND
Short Sale Specialist
Weichert Realtors (Marlboro ~ Manalapan office)
455 Route 9 South
Manalapan, NJ 07726
917-723-5645 - cell
732-536-4400, ext 199 - office
www.AmberLovesRealEstate.com
"Your Reliable Resource For NJ Real Estate, Local Info & More"
Amber...great post!! Lots of myths out there about Short Sales. Your clients should feel relieved that they have a qualified agent assiting them through this trying period. Good luck!!
Amber - great post. There is a lot of misunderstanding out there (both Realtors and consumers) in terms of how short sales work. It takes an expert like yourself to help clients and consumers (and sometimes other Realtors) navigate through the process. We have had great success in the last year or two in terms or selling properties as short sales. ~ Chris
It is funny when a buyer thinks that because a home is a short sale they can buy it for 50 cents on the dollar. As you know that usually is not the case.
Amber, right you are that lenders have the power and don't have to accept a short sale AND they are all different.
I love your headline - Rumor vs. reality! Great post!
Great post! I love this series!
Great job linking to show some attractive short sale opportunities that can be had today.
Amber I like what you're saying here. Short sales have become such a big part of our market that you really have to consider them when factoring market value.
Amber,
Kathy is right..Great headline. Good post Amber ..thanks!
Great post Amber, educating the homeowner and getting them involved with the lender is so important. You have spelled it out very clearly for them! I know your clients must really appreciate your knowledge and professionalism!
Amber,
As always great post thorough and good information would have to admit i have not been
involved with any short sales in our market there are some but not to many always
enjoy reading your posts
Hey Amber...Short sale, traditional sale...any sale...the point is to price the listing to sell...the realtors who still "don't get that" and continue to buy listings will find they have little commission to buy anything...